Silver Price Breaks Above 2008 High in Early London Trading

Ever since the run-up after the FOMC meeting on Tuesday afternoon, the gold price hasn't done much of anything... hanging around just under the magic $1,300 level. Thursday's price action was more of the same. Gold's high price made it up to $1,297.20 spot at 11:30 a.m. Eastern.

Silver's price action was a little more interesting. The price didn't do much in Far East trading on Tuesday, but began to sell off shortly after London opened for trading on Thursday morning. This sell-off reached its nadir about 8:10 a.m. in New York. From that point, silver gained a bit, but began to rally more noticeably once the London p.m. gold fix was in moments after 10:00 a.m. Eastern time. The rally [such as it was] ended at 11:30 a.m... and then proceeded to trade sideways for the rest of the day. Silver's high price tick [$21.26 spot] was at 1:00 p.m. Eastern right on the button.

According to James Turk, the silver price made it up to $21.34 in early 2008 before the roof caved in. It appears that the silver world is waiting [nervously?] for that old high to get broken before really jumping back on the bandwagon. Thursday was the second day in a row that silver closed over $21... and I find that encouraging.

The world's reserve currency hit its low at precisely 3:00 p.m. Hong Kong time on Thursday afternoon, before recovering about 55 basis by 9:00 a.m. on their Friday morning... and had declined about 30 basis point in four hours as I write this shortly after midnight Eastern time. The U.S. dollar is hanging onto the 80 level by its fingernails.

With no direction forthcoming from the precious metals themselves, it appears that the precious metal stocks followed the movements of the Dow on Thursday... with the HUI finishing down 0.97%... and I wouldn't read a thing into that.

The CME's Comex delivery report showed that 40 gold and 10 silver contracts were posted for delivery on Monday. With the month winding down, the deliveries from the shorts to the longs that are standing for delivery are coming to an end. The process will begin anew with first day notice for delivery into the October gold contract. That day is Thursday, September 30th. Last day for delivery [and trading] for the September contract is the 29th.

Both the GLD and SLV ETFs had a report yesterday, but GLD reported a withdrawal of 87,942 ounces. There was also a withdrawal form GLD on Tuesday as well. This is very strange considering the price action. But over at SLV yesterday, they reported receiving another big chunk of silver. This time it was 2,348,170 troy ounces. In the last three days, SLV has taken in 6.4 million ounces.

The U.S. Mint had another sales report yesterday as well. They reported a smallish 1,500 ounces of gold sold into their gold eagle program... another 1,500 one-ounce 24-K gold buffaloes... plus a tiny 50,000 silver eagles. Month-to-date, the U.S. Mint has sold 57,500 ounces of gold in the gold-eagle program... 10,000 one-ounce gold buffaloes... and 1,095,000 silver eagles.

There were pretty big movements over at the Comex-approved depositories on Wednesday. It was all confined to Brinks and HSBC. Between the two of them, they shipped out 1,192,965 ounces of silver. The link to that activity is here.

¤ Critical Reads

Poor property sales add to US woes

Today's first story was sent to me by Australian reader Wesley Legrand. It's a story about August U.S. home sales figures in a story posted late last night in The Telegraph out of London. America's economy has suffered another blow as housing sales figures for August came in at close to their weakest level on record. The headline reads "Poor property sales add to US woes"... and the link is here.

Starbucks to hike prices on 'labor intensive' drinks

The next item I have for you is this story about inflation that was sent to me by reader Scott Pluschau. Soaring raw coffee prices have claimed their first casualty. Coffee giant Starbucks said late Wednesday that it will raise the price of "labor-intensive and larger-sized" beverages because of soaring prices of green Arabica coffee beans. They won't be the first... as soaring food prices of all kinds are going to hit the fast food and restaurant industry pretty hard if prices continue at these levels for much longer. The headline reads "Starbucks to hike prices on 'labor intensive' drinks"... and the story is posted over at money.cnn.com. The link is here.

Amid Tension, China Blocks Vital Exports to Japan

China and Japan are currently at daggers drawn in a dispute over Japan’s detention of a Chinese fishing trawler captain. In a story posted in the Wednesday edition of The New York Times, it was reported that China had blocked shipments of rare earth elements to Japan. China denied this story on Thursday... but here it is anyway. The headline states "Amid Tension, China Blocks Vital Exports to Japan". It's very much worth the read... and I thank reader Phil Barlett for sending me this story... and the link is here.

Trade fears as China denies restricting exports to Japan

The story about China denying the restriction of exports was sent to me by Australian reader Wesley Legrand... and is posted in the Western Australia newspaper watoday.com.au. The headline reads "Trade fears as China denies restricting exports to Japan". This story is definitely a must read... and the link is here.

Irish Opposition Leaders Are Pushing For Anglo Irish To Default On Its Bondholders

The bad news on Ireland and its banks just gets worse every day. I'd say that they're in just as much trouble as Greece, if not more. I have three stories on that. The first is from 'David in California'... and is posted over at the businessinsider.com. The headline reads "Irish Opposition Leaders Are Pushing For Anglo Irish To Default On Its Bondholders"... and the link is here.

In Two-Front War, Irish Finance Boss Battles Illness, Renewed Fiscal Fears

The next one is courtesy of Washington state reader S.A. It's posted in yesterday's edition of The Wall Street Journal... and bears the headline "In Two-Front War, Irish Finance Boss Battles Illness, Renewed Fiscal Fears". The link is here.

Ireland faces double dip, mulls restructuring of junior bank debt

The last story on Ireland is from reader Roy Stephens. This time Ambrose Evans-Pritchard weights in on the crisis with an article headlined "Ireland faces double dip, mulls restructuring of junior bank debt". Irish borrowing costs have surged to a post-EMU record after Ireland's recovery buckled over the summer and Dublin said creditors of Anglo Irish Bank may be asked to "share" losses, a warning to bondholders that the dam may at last be breaking on debt restructuring in the eurozone. The link to that story is here.

BOJ Intervenes For Second Time In A Week, Fails

This just in. Reader 'David in California' sent me a zerohedge.com piece headlined "BOJ Intervenes For Second Time In A Week, Fails". If the BoJ was in the markets earlier this morning... I sure don't see it in the US$ chart anywhere. The link to this short story [and the graph] is here.

Investors Are Deaf to the Screams of Gold, Cotton

The next item is an op-ed piece from the London bureau of Bloomberg News. It's by Mark Gilbert, the London bureau chief and columnist for Bloomberg News. Mark doesn't take any prisoners in this piece that's headlined "Investors Are Deaf to the Screams of Gold, Cotton". This article [courtesy of Washington state reader S.A.] is definitely a must read... and the link is here.

Barrick Gold's president and CEO, Aaron Regent

Here's a gold-related interview that Russian reader Alex Lvov sent me that's posted over at cnbc.com. It's with Barrick Gold's president and CEO, Aaron Regent. It runs a bit over eight minutes... and the link is here.

Big Money Continues Buying Dips

My last precious metals-related item is to be found posted over at King World News. GoldMoney founder and GATA consultant James Turk talked to Eric King yesterday... and the headline of this brief commentary states "Big Money Continues Buying Dips". You can read the interview at the KWN blog... and the link is here.

There are no markets anymore... only interventions. - Chris Powell, GATA

Well, you can't make a silk purse out of a sow's ear. Yesterday wasn't very exciting, as it was one of those days like watching paint dry. Volume in both metals was pretty chunky again... even with all the roll-overs taken out.

Today we get the latest Commitment of Traders report. As I mention every week, I wonder if the usual Tuesday shenanigans in both metals are going to be in it... and how bad the report is going to be. The report, when it's released at 3:30 p.m. Eastern time sharp, is linked here.

Well, there was a bounce in the gold price going into the London open this morning... and silver just surpassed its old 2008 high of $21.34 the ounce. I'm not sure if that's good or bad news, as all of us at GATA have very long [and very unhappy] memories regarding price spikes in both gold and silver when they occur around 3:00 a.m. Eastern time. Maybe this time things will be different.

The rest of the Friday trading day could be interesting.

I hope your weekend is a good one... and I'll see you on Saturday.